Correlation Between Bank of America and Prima Andalan
Can any of the company-specific risk be diversified away by investing in both Bank of America and Prima Andalan at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Prima Andalan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Prima Andalan Mandiri, you can compare the effects of market volatilities on Bank of America and Prima Andalan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of Prima Andalan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Prima Andalan.
Diversification Opportunities for Bank of America and Prima Andalan
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Prima is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Prima Andalan Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Andalan Mandiri and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with Prima Andalan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Andalan Mandiri has no effect on the direction of Bank of America i.e., Bank of America and Prima Andalan go up and down completely randomly.
Pair Corralation between Bank of America and Prima Andalan
Considering the 90-day investment horizon Bank of America is expected to generate 2.86 times more return on investment than Prima Andalan. However, Bank of America is 2.86 times more volatile than Prima Andalan Mandiri. It trades about 0.27 of its potential returns per unit of risk. Prima Andalan Mandiri is currently generating about -0.21 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Prima Andalan Mandiri
Performance |
| Timeline |
| Bank of America |
| Prima Andalan Mandiri |
Bank of America and Prima Andalan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Prima Andalan
The main advantage of trading using opposite Bank of America and Prima Andalan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Prima Andalan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prima Andalan will offset losses from the drop in Prima Andalan's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Prima Andalan vs. Baramulti Suksessarana Tbk | Prima Andalan vs. Mitrabara Adiperdana PT | Prima Andalan vs. Adaro Minerals Indonesia | Prima Andalan vs. RMK Energy PT |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |